Don’t Feel Like a Chump When You Close on Your New Mortgage
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Mortgage closing costs dropped 7 percent over the past year, falling to $1,847 on a $200,000 loan, according to a new analysis by Bankrate.
Typical closing costs varied by state, ranging from $2,163 in Hawaii to $1,613 in Ohio. You can find the average rate for your state in the table below.
Lenders compete for business, so shopping around with at least three mortgage providers can help you reduce the fees associated with your loan. “Homebuyers have more say over closing costs than they think,” Bankrate Senior Mortgage Analyst Holden Lewis said in a statement.
Even as banks lower their mortgage fees, they’re increasing fees in most other categories, according to MoneyRates.com.
While lower mortgage fees are good news for homebuyers and those refinancing their loans, the average saving amount to just $140. That’s not much relative to the total costs associated with buying a house. The average down payment for homebuyers in the first quarter of 2015 was $57,710, for example.
Related: Want Your Own Home? Here’s How to Do the Math
The costs don’t stop once the buyers move in. On top of mortgage payments, homeowners face an average of more than $6,000 in additional costs related to their house, including homeowners insurance, property taxes and utilities.
The National Association of Realtors expects home prices to increase 6.5 percent this year to a median $221,900, which would put them at the same level as their 2006 record high.
For buyers, better news than the lower mortgage fees is that rates remain relatively low, falling to 3.98 percent last week, per Freddie Mac.
Closing costs | |||
---|---|---|---|
State | Average origination fees | Average third-party fees | Average origination plus third-party fees |
Alabama | $1,066 | $776 | $1,842 |
Alaska | $935 | $922 | $1,857 |
Arizona | $1,208 | $761 | $1,969 |
Arkansas | $1,057 | $760 | $1,817 |
California | $937 | $896 | $1,834 |
Colorado | $1,192 | $719 | $1,910 |
Connecticut | $1,074 | $960 | $2,033 |
Delaware | $904 | $924 | $1,828 |
District of Columbia | $1,077 | $718 | $1,794 |
Florida | $1,028 | $778 | $1,806 |
Georgia | $1,058 | $821 | $1,879 |
Hawaii | $1,033 | $1,130 | $2,163 |
Idaho | $894 | $788 | $1,682 |
Illinois | $1,080 | $767 | $1,847 |
Indiana | $1,067 | $770 | $1,837 |
Iowa | $1,161 | $762 | $1,923 |
Kansas | $1,047 | $753 | $1,800 |
Kentucky | $1,060 | $737 | $1,797 |
Louisiana | $1,060 | $817 | $1,877 |
Maine | $897 | $830 | $1,727 |
Maryland | $1,093 | $742 | $1,835 |
Massachusetts | $905 | $851 | $1,756 |
Michigan | $1,072 | $746 | $1,818 |
Minnesota | $1,067 | $689 | $1,757 |
Mississippi | $1,046 | $837 | $1,884 |
Missouri | $1,040 | $792 | $1,833 |
Montana | $1,062 | $855 | $1,917 |
Nebraska | $1,047 | $770 | $1,817 |
Nevada | $1,002 | $848 | $1,850 |
New Hampshire | $1,084 | $750 | $1,835 |
New Jersey | $1,181 | $913 | $2,094 |
New Mexico | $1,076 | $876 | $1,952 |
New York | $1,032 | $879 | $1,911 |
North Carolina | $1,036 | $875 | $1,911 |
North Dakota | $1,045 | $791 | $1,836 |
Ohio | $933 | $681 | $1,613 |
Oklahoma | $1,027 | $734 | $1,761 |
Oregon | $1,080 | $785 | $1,864 |
Pennsylvania | $1,055 | $678 | $1,733 |
Rhode Island | $1,093 | $802 | $1,896 |
South Carolina | $1,058 | $837 | $1,895 |
South Dakota | $1,055 | $704 | $1,759 |
Tennessee | $1,033 | $773 | $1,806 |
Texas | $1,031 | $833 | $1,864 |
Utah | $909 | $788 | $1,697 |
Vermont | $1,074 | $862 | $1,936 |
Virginia | $1,050 | $787 | $1,837 |
Washington | $1,077 | $824 | $1,901 |
West Virginia | $1,067 | $904 | $1,971 |
Wisconsin | $1,047 | $723 | $1,770 |
Wyoming | $874 | $814 | $1,689 |
Average | $1,041 | $807 | $1,847 |
Bankrate.com surveyed up to 10 lenders in each state in June 2015 and obtained online Good Faith Estimates for a $200,000 mortgage to buy a single-family home with a 20 percent down payment in a prominent city. Costs include fees charged by lenders, as well as third-party fees for services such as appraisals and credit reports. The survey excludes title insurance, title search, taxes, property insurance, association fees, interest and other prepaid items.
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More than half of registered voters polled by Morning Consult and Politico said they support work requirements for Medicaid recipients. Thirty-seven percent oppose such eligibility rules.
Martin Feldstein Is Optimistic About Tax Cuts, and Long-Term Deficits
In a new piece published at Project Syndicate, the conservative economist, who led President Reagan’s Council of Economic Advisers from 1982 to 1984, writes that pro-growth tax individual and corporate reform will get done — and that any resulting spike in the budget deficit will be temporary:
“Although the net tax changes may widen the budget deficit in the short term, the incentive effects of lower tax rates and the increased accumulation of capital will mean faster economic growth and higher real incomes, both of which will cause rising taxable incomes and lower long-term deficits.”
Doing tax reform through reconciliation — allowing it to be passed by a simple majority in the Senate, as long as it doesn’t add to the deficit after 10 years — is another key. “By designing the tax and spending rules accordingly and phasing in future revenue increases, the Republicans can achieve the needed long-term surpluses,” Feldstein argues.
Of course, the big questions remain whether tax and spending changes are really designed as Feldstein describes — and whether “future revenue increases” ever come to fruition. Otherwise, those “long-term surpluses” Feldstein says we need won’t ever materialize.
JP Morgan: Don’t Expect Tax Reform This Year
Gary Cohn, President Trump’s top economic adviser, seems pretty confident that Congress can produce a tax bill in a hurry. He told the Financial Times (paywall) last week that the Ways and Means Committee should be write a bill “in the next three of four weeks.” But most experts doubt that such a complicated undertaking can be accomplished so quickly. In a note to clients this week, J.P. Morgan analysts said they don’t expect to see a tax bill passed until mid-2018, following months of political wrangling:
“There will likely be months of committee hearings, lobbying by affected groups, and behind-the-scenes horse trading before final tax legislation emerges. Our baseline forecast continues to pencil in a modest, temporary, deficit-financed tax cut to be passed in 2Q2018 through the reconciliation process, avoiding the need to attract 60 votes in the Senate.”
Trump Still Has No Tax Reform Plan to Pitch
Bloomberg’s Sahil Kapur writes that, even as President Trump prepares to push tax reform thus week, basic questions about the plan have no answers: “Will the changes be permanent or temporary? How will individual tax brackets be set? What rate will corporations and small businesses pay?”
“They’re nowhere. They’re just nowhere,” Henrietta Treyz, a tax analyst with Veda Partners and former Senate tax staffer, tells Kapur. “I see them putting these ideas out as though they’re making progress, but they are the same regurgitated ideas we’ve been talking about for 20 years that have never gotten past the white-paper stage.”
The Fiscal Times Newsletter - August 28, 2017
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